Emami bets on direct retail

Reducing dependence on wholesale will offering greater visibility to new brands

Kolkata-based Emami Group’s flagship venture, Emami Ltd, has embarked on a massive restructuring of its distribution network that looks to cut dependence on the wholesale network and put its products directly on retail shelves. Analysts say smaller-to-mid-sized fast-moving consumer goods (FMCG) companies mostly use indirect sales via wholesalers to get their brands to far-flung markets; the reason being, higher cost of servicing a direct sales network. “However, when these companies grow and achieve a certain economies of scale, then they start opting for a direct retail reach which offers several benefits,” Abneesh Roy, senior vice-president of institutional equities at Edelweiss